Named Driver Policies Banned In Dallas Texas Here’s What You Need To Know
Named driver auto insurance policies, sometimes called junk policies, are no longer allowed in the great state of Texas. This upheaval will help protect consumers and eliminate an advantage some smaller less reputable auto insurance companies had over the big players in the market. Are you losing your named driver policy in 2020? Here’s what you need to know.
What Is A Named Driver Policy?
A named driver plan is a super cheap liability policy that includes somewhat cryptic language about what drivers are included and excluded from the policy. The vehicle or household isn’t covered, the named driver is only. Small insurance companies used this type of policy to reduce risk which allowed them to offer extremely cheap auto insurance quotes. Larger auto insurance carriers like State Farm and Allstate didn’t provide these types of plans that they called “junk policies.” The named driver plan allowed smaller auto insurance agencies to write a cheap auto insurance policy that often denied claims and offered very little protection.
What Did The Named Driver Policy Get Banned?
Texas banned named driver policies and as of January 1st, 2020, named policies can no longer be written or renewed. This has left some people who took out these policies due to their cheap premiums wondering why. While at first glance it may seem like the cheapest option is being taken off the table, the real spirit of the ban is to protect consumers and victims of accidents.
The named driver policies were often misleading and people did not understand the limitations. If anyone other than the named driver was in the driver’s seat during an accident the claims were not covered. This left accident victims that were not at fault without any insurance protection which defeats the state mandate that everyone that drives must have insurance.
You can still get limited liability auto coverage at cheap rates, but the named driver policy itself no longer exists.
What Are Some Other Ways You Can Get Cheaper Auto Insurance in Dallas?
If auto insurance is putting a strain on your finances, there are other ways to find cheap auto insurance. Here are a few tips to reduce the cost of your insurance:
Drive older vehicles, new cars are more expensive to insure
Take defensive driving courses
Install safety or anti-theft features
Maintain a clean driving record
Work to improve your credit score
Take advantage of all available discounts
Pay annually or if you pay monthly use auto draft
If you are a two-car family and can get by with one, for the time being, put one car in storage and notify your insurance company
Choose a plan with a higher deductible if possible
Avoid making unnecessary claims